Called ‘Best’ (Bacardi Environmental Sustainability Tracking), the new system represents an innovative best practice in assessing a variety of metrics typically included in sustainability initiatives.
Bacardi created the system using general accounting principles. The Company then built upon standard metrics to include non-financial performance measurements in water use, energy use and greenhouse gas emissions from all of its manufacturing operations. The results provide an accurate assessment of not simply the cost of goods, but also the degree of efficiency in the Company’s use of resources.
Using the Best method, Bacardi is able to gain a precise comparison of its performance against sustainability initiatives over time. The Company calculates very specific data from a set baseline to understand just how much water and energy it would have used in prior years if those years had had the current-year mix of goods and services.
“The methodology advances Bacardi’s sustainability efforts through an application of the principles of activity based flexible budgeting to produce indices of improvements (efficiency metrics) for sustainability KPIs based in physical quantities rather than monetary amounts,” said Poole College of Management at North Carolina State University professors Jon Bartley, Frank Buckless, Al Chen, Scott Showalter and Gilroy Zuckerman, in Strategic Finance magazine. “These new metrics have transformed the way Bacardi measures progress in meeting its key sustainability objectives, and they represent an innovative best practice for management control and for external reporting.”
Source: Bacardi Limited
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